CEO-to-Worker Compensation Ratio

Description: 

Ratio of annual CEO compensation at the top 350 U.S. firms ranked by sales to annual compensation of the workers in the key industries of the firms.

Source: 

Mishel, Lawrence and Alyssa Davis. 2014. “CEO Pay Continues to Rise as Typical Workers are Paid Less.” Economic Policy Institute.

Methodological Notes: 

The data presented are averages of firm-specific ratios of CEO compensation to worker compensation. CEO compensation is drawn from the ExecuComp database from Compustat, and it includes salary, bonus, restricted stock grants, options exercised, and long-term incentive payouts. It isn't possible to measure actual worker compensation for particular firms, so the denominator of the firm-specific ratios is the average annual compensation for production and nonsupervisory workers in the key industry of each firm, calculated using data from the Bureau of Economic Analysis and the Bureau of Labor Statistics.

The 2012 and 2013 samples exclude Facebook because the compensation of its CEO is such an outlier that including it dramatically alters the results (the company was not public prior to 2012). Results excluding and including Facebook are reported in Mishel and Davis (2014).

Full methodological details are described in "Methodology for Measuring CEO Compensation and the Ratio of CEO-to-Worker Compensation."